1. The population in the current year is 31.5 million and the real GDP is $814 million. The previous year's statistics were a population of 31 million and a real GDP of $800 million. The change in the standard of living, measured by growth in real GDP per person, is

A) 1.6 percent.

B) 7.75 percent.

C) 0.13 percent.

D) 6 percent.

E) 0 percent.

2. According to the data in the table above,

A) the standard of living improved between year 1 and year 2.

B) the standard of living worsened between year 1 and year 2.

C) as measured by real GDP per person, the standard of living remained the same between year 1 and year 2.

D) real GDP grew more rapidly than population between year 1 and year 2.

E) real GDP grew more slowly than population between year 1 and year 2.

3.Based on historical data on the prices of natural resources, which statement best describes how natural resources limit economic growth?

	a.	Prices have been increasing, which shows that natural resources become scarcer and this impedes growth.
	b.	Prices of natural resources have been fluctuating, which shows that there is no correlation between growth and natural resources.
	c.	Prices of natural resources have been decreasing in constant dollars, which shows that natural resources are not scarcer than they were in the past, thus economic growth is not limited by natural resources.
	d.	Prices do not show whether resources limit growth because the natural resources that economies use are not the same today as those in the past.

4.Economist Michael Kremer provides some support for the hypothesis that an increase in population might foster economic prosperity. Which statement best explains this hypothesis?

	a.	More people can produce more ideas, which contribute to increasing productivity.
	b.	More people are able to produce more output, everything else being the same.
	c.	A larger population implies more demand for goods and services, which stimulates the economy.
	d.	When there is a large number of children, governments need to invest more in education, which fosters economic growth.

5) Suppose that an Intel worker rearranges existing machines and labor and increases the quantity of chips Intel can produce. Using the productivity curve graphed, this innovation would be described as

A) a movement upward along the curve.

B) a movement downward along the curve.

C) a shift of the curve upward.

D) a shift of the curve downward.

E) no change to the productivity curve.

6.Which statement best describes the evolution of productivity growth in Canada?

	a.	From 1974 to 1982, Canadian productivity growth was slower than from 1966 to 1973. This continued a long-term downward trend in productivity growth.
	b.	From 1974 to 1982, Canadian productivity growth was slower than from 1966 to 1973. It appears that this was the result of a slowdown in technological progress.
	c.	From 1966 to 1973, Canadian productivity growth was slower than from 1974 to 1982. This continued an upward trend in productivity growth.
	d.	From 1966 to 1973, Canadian productivity growth was slower than from 1974 to 1982. It appears that this was the result of an upward trend in capital formation.

7.One of the ten principles of economics is that people face tradeoffs. The growth that arises from capital accumulation is not a free lunch. What is the opportunity cost of that capital accumulation?

	a.	People need to work longer hours, thus having less time for leisure.
	b.	People need to consume less goods and services now in order to enjoy more consumption in the future.
	c.	People need to recycle resources so that future generations can produce goods and services with the accumulated capital.
	d.	People need to devote less time in school and more at work.